The H&S patterns from the rally highs that I was looking at a week ago all made their target areas yesterday and SPX is now testing important support at 3900. This area was significant on the way up in early 2021, and was then key support in May, resistance in June, and was broken as resistance and backtested as support in July. Bulls need to hold this area if they want to go higher, and bears need to break it hard if they want to retest the 2022 low at 3636.87 and go lower.
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On The Road To 3910
In my post on Friday I was looking for a fail at the backtest of the 4200 SPX area, and a break down from the H&S patterns forming on the US equity indices and we saw that fail and all the H&S patterns broke down. None of those have yet made target.
SPX has broken back below the 45dma, now at 4030.05, so the reversion to the mean move has been completed and I won’t be posting this chart again for a while.
(more…)Backtesting 4200
I had my final divorce hearing this week and that is settled and done. It was a strange sight, lawyers really do strain at gnats and swallow camels. I do wonder how often anything resembling justice is seen in these places and whether, if seen, it happens by chance. I’m glad to be done with it and plan never to return.
In my last post I was laying out the obvious options for this week, and we saw the confirming close below the daily middle band, SPX did go down to the 4120 area as I suggested would be ideal if an H&S was to form and we saw the rally in the last two days that may have largely formed the right shoulder on that possible H&S.
(more…)Broken Flags
I was looking at the equity indices on Sunday, and there were decent looking short term bull flags across the equity indices. These were a good indicator for a rally high retest next but they only break up about 70% of the time. The rest of the time they break down or evolve into larger flags and these broke down.
(more…)Rolling Over
SPX has reached a peak of 9.57% over the 45dma on this run. That’s likely to be the highest reading as the 45dma is now rising significantly every day, and has risen 40 handles this week. We should now see a retracement that reaches at least close to the 45dma, now at 3971, and may go below it. Depending on the time taken to deliver that retracement I’d be leaning towards a target area 4000-50 as a very rough guide.
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